Byford Equipment Pty Ltd (the offender) appears for sentence after it pleaded guilty to an offence pursuant to s 32 Work Health and Safety Act 2011 (the Act) in that it failed to comply with the health and safety duty it owed pursuant to s 19(1) of the Act and thereby exposed a worker in its business or undertaking, Callum Pearson, to a risk of death or serious injury.
The maximum penalty for the offence is a fine of $1.5 million.
[2]
Facts
The parties tendered an Agreed Statement of Facts that can be summarised as follows.
The offender operated a business designing, constructing and fabricating stainless steel tankers for the transportation and storage of milk, wine, water, chemicals and grain. The offender's business operated from premises in Moama, New South Wales, where it employed approximately 120 workers.
In or about November 2017 Mr Pearson was employed by the offender as an apprentice auto-electrician. He commenced full time work at that time on the basis that his apprenticeship would commence in late February 2018. At the time of the incident his duties included cleaning barrels and sheeting.
The fabrication of stainless steel tankers involved a tanker moving through five key sections of the premises, where it would undergo a variety of welding and fitting out works before it was in final form and ready for use. In "Section 5" of the premises, final fixtures are fitted to the tankers and the internal and external surfaces of the tanker are cleaned. The stainless steel used in the tankers has a plastic layer on it for protection against marks and scratches during the production process. The removal of the plastic in Section 4 leaves a residue inside the tankers which needs to be cleaned off to make the internal surface of the tanker sterile and clean. A product known as "Wax and Grease Remover" was used for this purpose and the process was generally referred to as "wiping out" the inside of the tankers.
On 13 February 2018 Mr Pearson was working on a stainless steel tanker known as a BP 4.5m Tanker (Barrell Profile) "Booth Tanker" (the Tanker) comprising of five or six compartments of various sizes. The Tanker was still under construction. Each compartment was accessible through a manhole on the roof of the Tanker. To get to the manhole, workers would walk along the top of the Tanker on a walkway known as the "catwalk". The catwalk was accessed from the rear of the Tanker using a ladder. The depth of the Tanker at the place of the incident was 1737mm. A temporary ladder was used to get from the catwalk to the bottom of a compartment.
At about 9.30am Mr Pearson was asked by his supervisor to clean the inside of the Tanker and to remove any refuse inside it. Unknown to Mr Pearson, the Tanker had already been wiped out. However, Mr Pearson understood from his supervisor's request that he was being asked to wipe out the Tanker using Wax and Grease Remover. Mr Pearson had worked in Section 5 since November 2017 and had performed this activity on prior occasions. On those occasions, Mr Pearson was a member of a group of workers and had not worked alone.
Mr Pearson collected a ventilation pump referred to as a "blower" for use while he cleaned out the Tanker. A blower is a mechanical ventilation device designed to introduce clean air into the compartment and to circulate air for the purpose of maintaining a safe atmosphere within the confined space and to reduce the hazard of a build-up of fumes from the cleaning product. The blower also kept workers cool whilst performing work inside the Tanker. The workers had been instructed to use blowers when performing work inside a tanker. A blower was attached to a central group of pipes known as the header running the length of the Tanker and meeting at a central point known as the manifold. Each individual compartment of a tanker had an outlet that was accessible from the side of the Tanker. A blower was attached to the specific outlet of the compartment to be accessed through the manifold.
Mr Pearson attached the blower to the outlet for compartment 1 of the Tanker and then entered compartment 1 and wiped it out. When Mr Pearson came to compartment 5 of the Tanker he noticed that the header and the manifold pipe work under the Tanker was not present or had been removed. At the time, the work on the manifold had not been completed so the outlet to compartment 5 was not connected to the manifold. Accordingly, the blower could not be connected to compartment 5 of the Tanker in the usual way. Mr Pearson did not tell his supervisor that the pipework was missing or that he was unable to connect the blower to compartment 5 of the Tanker. Mr Pearson did not stop the task and ask for assistance.
Mr Pearson obtained a P3 respirator paint mask and put it on. The mask covered half of Mr Pearson's face and contained a breathing filter. Mr Pearson was also wearing safety glasses.
Mr Pearson filled a spray bottle with more Wax and Grease Remover from a drum located in the paint room. Mr Pearson then proceeded to enter compartment 5 of the Tanker to wipe it out. The Tanker compartment had not been subject to atmospheric testing prior to his entry. In the process of wiping out the Tanker, Mr Pearson noticed he was in a type of "mist" and that his eyes became itchy and he experienced a stinging sensation in his eyes. He struggled to open his eyes and was continuously rubbing them.
At about this time two other workers were on the catwalk of the Tanker performing welding work. One of them noticed a light on in compartment 5 of the Tanker. When the worker looked into compartment 5 he observed Mr Pearson apparently unconscious inside the compartment. He called to Mr Pearson, but he did not respond. The worker called a supervisor and Mr Pearson was removed from compartment 5 of the Tanker. Initially, Mr Pearson responded to questions in an incoherent fashion, mumbling and slurring his words. He was taken outside of the factory to await the arrival of an ambulance. By this time, Mr Pearson's speech improved, and he appeared to be speaking normally. Mr Pearson was treated by paramedics and taken to Echuca Hospital.
Fire and Rescue NSW measured the amount of combustible vapour in and around compartment 5 at 10.36am. They recorded 23% of the solvent vapour's lower explosive (flammable) limit. Fire and Rescue reported that management had ventilated the area and tank.
Mr Pearson sustained a loss of consciousness as a result of being exposed to and overcome by solvent fumes. He was observed at hospital for about 30 minutes. He had three days off work before returning to normal duties.
Prior to the incident, the offender had in place a Safety Management Plan (SMP) that applied to the entire premises. The SMP was a 60 page document containing various parts of the offender's safety system.
The offender had in place a Standard Operating Procedure relating to the entry of confined spaces dated 17 June 2010 (the SOP). The SOP required the preparation of a written risk assessment for workers undertaking in a confined space, noting the nature and inherent hazards of a confined space, the work required to be done and the hazards and risks involved with the actual method of work selected and the equipment to be used. The risk assessment was required to be reviewed and approved by a supervisor issuing a written approval for the work in the form of Entry Permit. The SOP required the testing of the atmosphere in a confined space using a gas detector and a minimum of 10 minutes mechanical ventilation before entry into the confined space. The SOP provided that the minimum size of a work party was two people, one of whom was to remain outside the confined space. The SOP provided that employees and contractors working in a confined space were to be trained in Confined Space Entry procedures.
The Confined Space Entry Permit process was not routinely enforced on site. Mr Pearson had never been shown a copy of the SOP. Mr Pearson had not been required to obtain or sign onto a Confined Spaces Entry Permit prior to the incident.
The offender also had a Safe Work Method Statement (SWMS) for entering confined spaces to peel off the plastic layer from the stainless steel and wipe out the tankers. The SWMS provided that a person must have undergone confined spaces training prior to entering a confined space. The SWMS stated that a gas detector and an extraction system must be used and that persons inside the confined space must be continually monitored. The SWMS contained a list of hazards to consider including inhalation of dust and fumes and oxygen deficiency. The SWMS did not contain all hazards associated with the Wax and Grease Remover, for example, the risk involved with Wax and Grease Remover coming in contact with a worker's skin.
The SWMS listed the residual risk rating as high to extreme. It specified the use of a P3 respirator but did not specify which means of mechanical ventilation was to be used. A P3 respirator, on its own, was not appropriate for use to control the risk presented by solvent vapours.
The offender did not require workers to sign the SWMS prior to entering confined spaces. Mr Pearson told SafeWork that he was shown the SWMS prior to the incident but did not recall being trained on its contents. Mr Pearson had not been asked to sign the SWMS and he had not had any formal training on working in confined spaces.
Mr Pearson had received on-the-job training involving observing others and then replicating their behaviour. On the prior occasions that he had undertaken the wiping out of tankers, he had been under supervision. The offender had no documented training or induction process in place. Mr Pearson was not aware of the formal processes associated with confined spaces and he did not know that he required a qualification to work in confined spaces. Mr Pearson was booked in to undertake confined space training on 5 March 2018.
Mr Pearson was given some instruction by his supervisor that caused him to believe that the use of a blower to perform the task of wiping out a tanker was not a mandatory requirement of the offender.
At the time of the incident, the offender was using an expired version of the Material Safety Data Sheet (MSDS) for the Wax and Grease Remover. Mr Pearson was not adequately trained in the use of hazardous chemicals nor was he aware of the MSDS or any updated version relating to the Wax and Grease Remover. Mr Pearson was not adequately informed of the dangers or hazards associated with the use of the Wax and Grease Remover. Mr Pearson was given on-the-job instructions relating to the use of hazardous chemicals at the site, but workers were not provided with formal training on the use and storage of hazardous chemicals. Hazardous chemicals and products were not stored in labelled bottles at the premises.
There was no specific person allocated by the offender who was responsible for developing, implementing and maintaining the work health and safety management systems and processes. When a new member of staff commenced work, the nature and extent of the on-the-job training was provided on an ad hoc basis.
There were numerous sources of guidance material available relating to the risks involved in confined space work and the control measures to be implemented to control those risks, including:
1. the requirements regulations 62-77 of the Work Health and Safety Regulation 2017 (the Regulations);
2. AS 2865-2009 "Confined Spaces" dated 4 September 2009;
3. Safe Work Australia's Confined Spaces Code of Practice dated December 2011 (the Code);
4. Safe Work Australia's Managing Risks of Hazardous Chemicals in the Workplace Code of Practice dated July 2004 (the Chemicals Code);
5. Wax and Grease Remover MSDS issued in 2005;
6. Wax and Grease Remover MSDS issued in 2017; and
7. WorkCover NSW Safety Alert "Cleaning Solvents and Thinners" dated August 2012.
Between 20 February 2018 and 13 April 2018, the offender was issued with five improvement notices by SafeWork NSW, relating to tasks concerning the use of chemicals and work in confined spaces. The offender complied with all of the improvement notices. It introduced a dedicated confined space stand-by person to walk the catwalk acting as a spotter and introduced colour identification system for managing hazardous chemical containers. Hazardous chemicals were confined to a storage room.
After the incident the offender has implemented a number of improvements to its safety systems. It had purchased additional blowers and refurbished the blowers it already owned. It added to its Confined Space Permit System reference to the use of MSDS. It introduced compulsory confined space training for all workers at its premises, which is still in the process of being implemented. The labelling of hazardous chemicals has been improved. The rescue team on site received further training and implemented additional procedures, including a formal documented rescue plan. Additional workers at the premises have received first aid training. A specific spotter's role was created and filled by a person with supervisory responsibilities who has undergone confined space and first aid training. The offender also undertakes regular safety walks and holds regular Safety Committee meetings.
[3]
Affidavit of Gary Byford sworn 29 April 2021
The offender read an affidavit of Gary Byford sworn 29 April 2021. Mr Byford participated in the proceedings by audio-visual link (AVL) but was not required for cross-examination. The content of Mr Byford's affidavit can be summarised as follows. I will not repeat matters I have already referred to.
Mr Byford is the managing director of the offender. He started the company 46 years ago. Mr Byford is currently suffering from a heart related illness for which he has been hospitalised. He was advised not to travel to Sydney for the purpose of the sentence hearing due to the state of his health.
Mr Byford completed an apprenticeship as a boilermaker at a firm specialising in making stainless steel tankers. He stayed with the company for 11 years overall and was appointed foreman at age 26.
Mr Byford is married with three children. His wife has worked in the offender's business, along with his eldest daughter, who is likely to succeed him. When Mrs Byford decided to wind down her involvement in the company, Mr Byford became the sole director and shareholder of it.
Mr Byford initially moved to rural Victoria for the purpose of operating a dairy farm. In the course of that enterprise he ascertained there was a need in the area to service and repair dairy equipment. He established a business repairing dairy equipment that grew quickly requiring him to build facilities for that business and to purchase specialist equipment. This was when the company was first incorporated.
The offender built a reasonably large workshop and it was engaged by a local dairy processor to repair milk tankers and to modify them to increase their volume. The company got a significant break when it was asked to build a silo capable of holding 250,000 litres of milk. From about that time on, the offender attracted requests from all over Australia for its services and products. The offender invented manhole access from underneath the tankers. This innovation greatly improved safety because it removed the "fall from height" risk. This innovation is now standard in the industry and has been taken up internationally as a patented design in New Zealand and Europe.
The offender's business was relocated to Moama, New South Wales, at the time when it was expanded. It was thought that more labour would be available from the border towns of Moama and Echuca. The offender has operated its factory on the current site since 2004. The offender mainly manufactures tankers for liquid products such as milk and wine but also canola oil and water. On occasions the offender has employed over 100 staff but currently employs about 85 people. The offender also has a smaller operation close to Melbourne.
The offender has made a contribution in regional Australia by providing employment to young people and has trained a large number of apprentices from 2004.
The offender also contributes to community and charitable organisations in an annual amount of about $35,000.
The offender's business suffers fluctuations according to the fortunes of farmers who are its customers. There are only two companies making stainless steel tanks in Australia and the offender faces significant competition from overseas producers. The offender needs significant research and development funds to keep it competitive in its market.
The offender has been able to keep a number of employees for an extended period. Mr Byford deposed that safety has always been a priority for the offender and for him personally. He has always been aware of the risks involved in the business and there has not been a serious accident in the 40 years of operation between 1978 and 2018.
Mr Byford, on behalf of the offender, accepts responsibility for the incident involving Mr Pearson. Mr Byford deposed that he assisted the investigators and participated in a record of interview at their request. Mr Byford, on behalf of the offender, accepts that the systems in place on the day of the incident were inadequate.
Following the incident in February 2018 the offender has placed a greater emphasis on upgrading equipment and up-skilling employees to further enhance safety. Financial records for the offender show that it has significantly increased its spending on uniforms and protective clothing, safety supplies and staff training in the time since the incident. An additional $80,000 per year has been allocated in each budget for the purchase of safety equipment.
The offender has spent additional funds on capital items including new safety lifting equipment and lighter aluminium safety platforms. It has also constructed a new paint storage shed and purchased a number of increased capacity blowers. It has also purchased an air conditioning unit for Section 3 to maintain comfortable temperatures inside barrels during the summer months.
The offender has introduced a confined space ID tag system for workers. This is a visual indicator as to who may be in a tanker at any point in time. It works in conjunction with the confined space entry book which is attached to the side of the tanker and is a visual cue to spotters as to the number of and the identity of workers who may be in a tanker.
Confined space training is now compulsory for all workers on tankers at the premises. So far, 23 workers have received confined space training and a worker is forbidden to enter a tanker until that training is satisfactorily completed. Each worker has been provided with a Sundstrom mask particle filter and gas filter as a personal item of equipment to be stored in their own tool box.
The offender has directed that Wax and Grease Remover can only be used for open air work and not inside a tanker. It has been removed from the workshop and only a foreman is permitted to issue it for use under strict supervision.
The offender has also implemented a manway lock out system as a physical barrier for unauthorised access into tankers. Only two workers are authorised to open up a locked manway on tankers. If either of those workers is absent, a delegate has been appointed.
The SWMS has been modified. Each section has been shown an instructional video that stresses why the SWMS must be completed properly and adhered to. The daily pre-start sessions focus on the SWMS required for the tasks to be undertaken on that day.
The spotter's role includes conducting atmospheric tests inside tankers at various stages of their manufacture. The results are taken and recorded. The pandemic has prevented the offender from sending some persons for training in Melbourne, but the offender plans to have that training undertaken as soon as practicable.
The offender overhauled its chemical storage system and introduced a distribution register for all chemicals used on site. It conducts regular safety walks and Safety Committee meetings. The fourth member of the Safety Committee must be a factory floor worker who is selected at random to attend a monthly meeting.
Mr Byford, on behalf of the offender, deeply regrets the incident and expressed a sincere apology. He describes the incident involving Mr Pearson as having a significant impact on the offender and on him personally.
Mr Byford was not at the premises on the date of the incident but was very proud of how his supervisors responded to it.
A supervisor of the offender contacted Mr Pearson's grandparents on several occasions to check on his welfare. Mr Pearson was advised that he could take off as much time as he required and that the company would do anything it could do to help him. On his return to work, Mr Pearson was told that he did not have to work in a tanker again and could be re-deployed to undertake other duties. Mr Pearson was grateful for the offer but indicated that he did not have an issue with working in tankers in the future.
The offender spends about $13 million per year in commerce with Australian businesses, a large proportion of that is paid to small and medium sized enterprises in the Murray Riverina region. In addition to financial contributions, the offender welcomes community groups for factory tours by community and educational groups. The company has also made financial contributions to assist its employees in times of need and hardship.
Mr Byford deposed that that he is proud of his staff and the fact that they demonstrated an ongoing commitment to safety. He deposed that the offender has made a significant contribution to the industry.
[4]
The offender's video presentation
The offender tendered a video presentation that was prepared for the purpose of the sentence hearing. It consisted of narrated footage relating to each of the tasks described in Mr Byford's affidavit and video evidence of each of the steps taken by the offender after the incident. [1] I observed from the video presentation that the work areas of the offender are extremely well organised and free from obstacles. The video was a thoroughly impressive and very persuasive piece of evidence because it gave me the opportunity to see the implementation of the improvements to the offender's safety system that were deposed to by Mr Byford.
[5]
Consideration
I have had regard to the objects of the Act set out in section 3 and the purposes of sentencing set out in section 3A Crimes (Sentencing Procedure) Act 1999.
[6]
Objective Seriousness
The offences are of some objective gravity.
The pleaded risks to a worker were all actually known to the offender:
1. being overcome by fumes in a confined space,
2. coming into contact with hazardous chemicals, and
3. the ignition of fumes in a confined space.
The offender had in place the SOP and the SWMS to control those risks. The offender's policies were inadequate in that they did not identify and/or control the risks specified in (b), although there was a reference to the use of impervious gloves in the SWMS. Most significantly, the offender failed to implement the controls specified in the SOP and the SWMS, which would have minimised the risks in (a) and (c).
Mr Pearson was inadequately trained on the SOP and the SWMS. On the day of the incident, he was directed to work in a confined space without proper supervision. I accept that Mr Pearson departed from his "on the job training", but only in circumstances where he was trying to exercise initiative and to complete the task he thought he had been set. Mr Pearson demonstrated his on the job training in the work he undertook in compartment 1 of the Tanker. The incident occurred a few weeks prior to when he was booked in for formal confined space training.
The offender recognised that the likelihood of the risk occurring was "very high to extreme" even if the identified control measures were implemented.
The parties agreed that the potential consequences of the risks in (a) and (c) were limited to a risk of serious personal injury. On the day of the incident, it was only a matter of luck that Mr Pearson was observed by other workers and his outcome could have been much worse.
The steps that could have been taken to minimise the risks were well known to the offender. Most of those steps had been specified by the offender in the SOP and SWMS and could have been implemented at very little cost.
Mr Pearson did not suffer any particular injury, made a full recovery and returned to full duties within a few days. By comparison to most cases in this jurisdiction, the extent of the harm was minimal.
I have taken into account the maximum penalty for the offence.
[7]
Deterrence
The penalty imposed in relation to this offence must provide for general deterrence. Employers must take the obligations imposed by the Act very seriously. The community is entitled to expect that both small and large employers will comply with safety requirements. General deterrence is a significant factor when safety obligations are breached: Bulga Underground Operations Pty Ltd v Nash [2016] NSWCCA 37 at [180].
The penalty imposed must also provide for specific deterrence. The offender still operates a large manufacturing business that poses a significant risk of harm to its workers. However, that must be tempered by reference to the offender's safety system that it had in place prior to the incident and the steps it has subsequently taken to improve that system, together with its prior good record.
[8]
Aggravating Factors
The prosecutor contended that Mr Pearson was a vulnerable victim and that the aggravating factor provided for s 21A(2)(l) Crimes (Sentencing Procedure) Act 1999, was established. The prosecutor's primary contention was that Mr Pearson was a young and inexperienced worker, who by reason of inadequate training and supervision by the offender could not protect himself from risks to his health and safety. The prosecutor's fall back contention was that Mr Pearson was vulnerable because he was a young apprentice.
the victim was vulnerable, for example, because the victim was very young or very old or had a disability, because of geographical isolation of the victim or because of the victim's occupation (such as a person working at a hospital (other than a health worker), taxi driver, bus driver, or other public transport worker, bank teller or service station attendant).
The provision is concerned with the vulnerability of a particular class of victim, who need to be protected because they are vulnerable to criminal offences generally or of a particular type: R v Tadrosse (2006) NSWLR 740 at [24]-[26]. The subsection provides examples of those classes of victims such as the "very young" or by reference to their occupation, but examples are not exhaustive: Perrin v R [2006] NSWCCA 64 at [35] and Longworth v R [2017] NSWCCA 119 at [17]. A combination of factors may justify a finding of vulnerability: Ollis v R [2011] NSWCCA 155 at [96].
The provision is not concerned with the threat posed by a class of offender, or circumstances relating to the offender: Tadrosse at [26].
I am not satisfied beyond reasonable doubt that the prosecutor has established the aggravating factor, for the reasons that follow. There was no evidence that young apprentices are disproportionately represented as victims in work, health and safety offences. I do not consider Mr Pearson to be "very young". He was 18 years of age and had reached his majority. I accept that he was an inexperienced worker, but work experience may not have protected him from risks posed by his work of which he was unaware. In this case, it was Mr Pearson's inadequate training and supervision that exposed him to the risk and the responsibility for the failure to provide for those matters was referrable to the offender.
Even if I accept that young apprentices are a class of victims, the extent to which they are vulnerable to work, health and safety offences depends on a multitude of factors that are not referable to their membership of the class, such as the standard of their training, the level of supervision and the nature of the work that they are tasked to perform.
[9]
Mitigating Factors
The offender does not have any record of previous convictions s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999. The offender has been operating a business that presents risks to the safety of its workers for about 50 years. I am satisfied that in the manufacturing industry, this is an exemplary safety record.
The offender has good prospects of rehabilitation: section 21A(3)(h) Crimes (Sentencing Procedure) Act 1999. The offender has demonstrated by its swift and comprehensive response that it has good prospects of rehabilitation. I am satisfied that Mr Byford exercises considerable day to day control over the affairs of the offender and that he is genuinely concerned about the health and safety of its workers. I am satisfied that Mr Byford's attitude will ensure that the offender pays significantly more attention to safety in the future.
The offender has demonstrated remorse: section 21A(3)(i) Crimes (Sentencing Procedure) Act 1999. Mr Byford on behalf of the offender accepted responsibility for the failings that led to the incident and has expressed remorse and contrition. I am satisfied that the offender's remorse is genuine.
The offender entered a plea of guilty: section 21A(3)(k) and section 22 Crimes (Sentencing Procedure) Act 1999. It is entitled to a discount on penalty that reflects the utilitarian value of that plea: R v Thomson & Houlton (2000) 49 NSWLR 383 and R v Borkowski (2009) 195 A Crim R 1 at [32]. The plea also indicates remorse: Borkowski at [32]. The appropriate discount is 25%.
The offender co-operated with the SafeWork investigation: section 21A(3)(m) Crimes (Sentencing Procedure) Act 1999.
The offender has demonstrated itself to be a good corporate citizen. It has been a major source of employment for young people in a regional area. It has provided a large number of young people with apprenticeships and trade qualifications. The offender has provided financial and logistical support to a number of community and charitable organisations. The offender has also made significant contributions to the industry in which it operates, particularly through innovative safety oriented designs of the tankers it manufactures.
[10]
Penalty
Byford Equipment Pty Limited is convicted.
The appropriate fine is $40,000 that will be reduced by 25% to give effect to the plea of guilty.
I impose a fine of $30,000.
The offender is to pay the prosecutor's costs of the proceedings, agreed in the sum of $35,000.
I order that pursuant to section 122(2) of the Fines Act 1996 that 50% of the fine is to be paid to the prosecutor.
[11]
Endnote
I have not set out a summary of what was presented in the video because to do so would involve substantial repetition of Mr Byford's evidence.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 12 May 2021